US financial regulator tells firms to implement official AML priorities

The AML priorities were issued earlier in 2021, pursuant to the Anti-Money Laundering Act of 2020 (the AML Act). They identify the key AML and counter-financing of terrorism (CFT) risks currently facing the US, including corruption, fraud and cybercrime (including cybersecurity and virtual currency considerations). The priorities are accompanied by guidance for covered financial institutions (FIs) on how they can manage their risks and implement appropriate AML/CFT measures.

FINRA has now followed up on this guidance, encouraging member firms “to consider how to incorporate the AML/CFT Priorities into their risk-based anti-money laundering (AML) compliance programs.”

It suggests that FIs begin their evaluation by reviewing so-called “red flags” identified and incorporated into their AML programs, advising that they consider updates to compliance measures “in light of the risks presented by factors such as their business activities, size, the geographic locations in which they operate, the types of accounts they maintain, and the types of transactions in which they and their customers engage.”

Further, FINRA has said that FIs should consider potential technological changes that would assist in incorporating the AML priorities into an AML/CFT risk-based program, for example updating the technology used to monitor and investigate suspicious activity.

“Upon the effective date of final regulations addressing the AML/CFT Priorities, member firms should be in a position to review and incorporate, as appropriate, the AML/CFT Priorities into their risk-based AML programs,” says FINRA.

The final regulations are expected in the coming months and, as mandated in the AML Act, FinCEN will update the priorities to take into account new or evolving risks at least once every four years.

Sources

• FINRA (regulatory notice, PDF)
• FinCEN (June 2021)
• Buckley
• Cadwalader Cabinet